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2021-11-04

Enstar Group Limited Reports Third Quarter Results

  • Net Loss of $196.0 million and Net Earnings of $364.6 million for the Three and Nine Months Ended September 30, 2021
  • Non-GAAP Operating Loss1 of $176.0 million and Non-GAAP Operating Income1 of $398.2 million for the Three and Nine Months Ended September 30, 2021
  • Fully diluted book value per share of $307.09 as of September 30, 2021, an increase of 26.7% year over year

HAMILTON, Bermuda, Nov. 04, 2021 (GLOBE NEWSWIRE) -- Enstar Group Limited (Nasdaq: ESGR) filed its quarterly report on Form 10-Q with the SEC earlier today, reporting its earnings (loss) and financial position for the three and nine months ended September 30, 2021.

Enstar reported a consolidated net loss of $196.0 million (or loss of $10.68 per fully diluted ordinary share) and consolidated net earnings $364.6 million (or earnings of $17.53 per fully diluted ordinary share) for the three and nine months ended September 30, 2021, respectively, compared to consolidated net earnings of $615.0 million (or earnings of $28.24 per fully diluted ordinary share) and $896.7 million (or earnings of $41.14 per fully diluted ordinary share) for the three and nine months ended September 30, 2020, respectively.

The key driver of the net loss for the three months ended September 30, 2021 was:

  • Net realized and unrealized losses of $273.3 million, including $285.2 million relating to our consolidated variable interest entity, the InRe Fund, from which we redeemed $1.5 billion. Following our decision to redeem, the InRe Fund's investments were impacted by significant volatility in Chinese and other global equity markets. We are continuing the orderly wind down of the InRe Fund's remaining investment portfolio, which was $447.7 million as of September 30, 2021.

The key drivers of net earnings for the nine months ended September 30, 2021 were:

  • Net investment income of $231.0 million and net realized and unrealized gains of $111.2 million including $299.8 million relating to our consolidated variable interest entity, other investments and equities, partially offset by $188.6 million in net realized and unrealized losses relating to fixed income securities; and
  • Earnings from equity method investments of $100.8 million.

Non-GAAP operating loss1 was $176.0 million (or loss of $9.59 per fully diluted ordinary share) and Non-GAAP operating income1 was $398.2 million (or income of $19.15 per fully diluted ordinary share) for the three and nine months ended September 30, 2021, respectively, compared to non-GAAP operating income of $574.4 million (or income of $26.37 per fully diluted ordinary share) and $804.2 million (or income of $36.89 per fully diluted ordinary share) for the three and nine months ended September 30, 2020, respectively.

Enstar's ordinary shareholders' equity at September 30, 2021 amounted to $5.6 billion (or $307.09 per fully diluted ordinary share), compared to $6.2 billion (or $281.20 per fully diluted ordinary share) at December 31, 2020. The Form 10-Q, which is available on Enstar's website, www.enstargroup.com, contains a more detailed description of Enstar's business and financial results.

About Enstar

Enstar is a NASDAQ-listed leading global insurance group that offers innovative capital release solutions through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. A market leader in completing legacy acquisitions, Enstar has acquired over 110 companies and portfolios since its formation in 2001. For further information about Enstar, see www.enstargroup.com.

Non-GAAP Operating Income

In addition to presenting net earnings (loss) attributable to Enstar ordinary shareholders and diluted earnings (loss) per ordinary share determined in accordance with U.S. GAAP, Enstar's management believes that presenting non-GAAP operating income (loss) attributable to Enstar ordinary shareholders and diluted non-GAAP operating income (loss) per ordinary share, non-GAAP financial measures as defined in SEC Regulation G, provides investors with valuable measures of our performance.

Non-GAAP operating income (loss) is net earnings (loss) attributable to Enstar ordinary shareholders excluding: (i) net realized and unrealized (gains) losses on fixed maturity investments and funds held - directly managed included in net earnings (loss), (ii) change in fair value of insurance contracts for which the fair value option has been elected, (iii) (gain) loss on purchases and sales of subsidiaries, if any, (iv) net (earnings) loss from discontinued operations, if any, (v) tax effect of these adjustments, where applicable, and (vi) attribution of share of adjustments to noncontrolling interest, where applicable. We eliminate the impact of net realized and unrealized (gains) losses on fixed maturity investments and funds held - directly managed, included in net earnings (loss), and change in fair value of insurance contracts for which the fair value option has been elected because these items are subject to significant fluctuations in fair value from period to period, driven primarily by market conditions and general economic conditions, and therefore their impact on our earnings is not reflective of the performance of our core operations. We eliminate the impact of (gain) loss on purchases and sales of subsidiaries and net (earnings) loss from discontinued operations because these are not reflective of the performance of our core operations. Diluted Non-GAAP operating income (loss) per ordinary share is diluted net earnings (loss) per ordinary share excluding the per diluted share amounts of each of the adjustments used to calculate non-GAAP operating income (loss).

Enstar's management believe these non-GAAP measures enable readers of our consolidated financial statements to analyze our results in a way that is more aligned with the manner in which our management measures our underlying performance. Enstar's management believe that presenting these non-GAAP financial measures, which may be defined and calculated differently by other companies, improves the understanding of our consolidated results of operations. These measures should not be viewed as substitutes for those calculated in accordance with U.S. GAAP.

Non-GAAP operating income (loss) attributable to Enstar ordinary shareholders is calculated by the addition or subtraction of certain items from within our consolidated statements of earnings (loss) to or from net earnings (loss) attributable to Enstar ordinary shareholders, the most directly comparable GAAP financial measure, as illustrated in the table below:

 Three Months Ended Nine Months Ended
 September 30, September 30,
 2021 2020 2021 2020
 (expressed in thousands of U.S. dollars, except share and per share data)
Net earnings (loss) attributable to Enstar ordinary shareholders$(195,958)  $615,013   $364,565   $896,745  
Adjustments:       
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